2013 Supreme(Raj) 2299
RAJASTHAN HIGH COURT AT JAIPUR BENCH
Bela M.Trivedi, J.
Devi Sahai Mittal & Ors. - Appellant
Versus
Sita Ram Agarwal & Ors. - Respondent
Civil Misc.Appeal No.5086 of 2008.
Decided On : 14-12-2013
For the Appellants:Ashok Mehta Senior Counsel and Devendra Sharma, Advocate.
For the Respondents:A.K. Sharma, Senior Counsel, Rachit Sharma, Anuroop Singhi, Saurabh Jain and Rachit Sharma, Advocates.
Delay and laches defeat equitable relief.
Headnote:
INJUNCTION - PARTNERSHIP - DISSOLUTION - DELAY AND LACHES - EQUITABLE RELIEF - RIICO LEASE DEED - CANCELLATION - WRIT PETITION - DISMISSAL - SUIT FOR DECLARATION, ACCOUNTS, MESNE PROFITS, AND CANCELLATION OF LEASE DEED - TEMPORARY INJUNCTION GRANTED BY TRIAL COURT - SET ASIDE BY APPELLATE COURT - KEY LEGAL PRINCIPLE: DELAY AND LACHES DEFEAT EQUITABLE RELIEF.
Fact of the Case:
Plaintiff, the proprietor of a firm, entered into a partnership with Defendant No. 1 in 1973. The partnership firm was reconstituted in 1976, and the plaintiff allegedly retired from the firm the same year. The partnership firm was later converted into a company. The plaintiff filed a suit in 2008 seeking various reliefs, including declaration, accounts, mesne profits, and cancellation of the lease deed in respect of the disputed plot. The trial court granted a temporary injunction restraining the defendants from transferring, alienating, or creating a charge over the disputed premises.
Finding of the Court:
The appellate court found that the plaintiff had failed to establish a prima facie case in his favor. The court noted that the plaintiff had not participated in the business of the partnership firm for about 20 years and had not explained his non-participation. The court also found that the plaintiff had only a 10% share in the profits of the firm, which had ceased to exist and was converted into a private limited company long back. The court further held that the trial court had erred in restraining the RFC from auctioning or selling the part of the disputed plot mortgaged to it for recovery of its dues.
Issues: 1. Whether the plaintiff had established a prima facie case in his favor for grant of temporary injunction. 2. Whether the plaintiff's suit was barred by delay, laches, and acquiescence. 3. Whether the trial court erred in restraining the RFC from auctioning or selling the part of the disputed plot mortgaged to it.
Ratio Decidendi: 1. The court held that the plaintiff had failed to establish a prima facie case in his favor as he had not participated in the business of the partnership firm for about 20 years and had not explained his non-participation. 2. The court held that the plaintiff's suit was barred by delay, laches, and acquiescence as he had remained silent for about 20 years after leaving the partnership firm and had raised disputes only after the original lease deed executed in his favor was canceled by RIICO. 3. The court held that the trial court had erred in restraining the RFC from auctioning or selling the part of the disputed plot mortgaged to it as the RFC was entitled to sell the mortgaged property for recovery of its dues.
Final Decision: The appellate court set aside the impugned order of the trial court and allowed both the appeals filed by the defendants.
JUDGMENT
1. - Both the appeals arise out of the impugned order dated 25.10.08 passed by the Addl. District Judge (Fast Track) No. 3, Jaipur City, Jaipur (hereinafter referred to as the trial court') in the T.I. Application No. 129/08, and, therefore were heard simultaneously and this common judgment is being passed.
2. The SBCMA No. 5086/08 has been preferred by the appellants Devi Sahai Mittal & Ors., whereas the SBCMA 3056/10 has been preferred by the appellant Rajasthan Financial Corporation Ltd. The appellants of the SBCMA No. 5086/08 are the defendant Nos. 1, 2 and 4, the Respondent No. 1 is the plaintiff, and the Respondent Nos. 2 to 4 are the defendant Nos. 5, 6 and 3 respectively in the suit. For the sake of convenience the parties shown in the SBCMA No. 5086/08 shall be referred as such hereinafter. The trial court vide the impugned order dated 25.10.08 had partly allowed the T.I. Application of the Respondent No. 1-plaintiff and had restrained the appellants i.e. the Defendants Nos. 1, 2 and 4 from transferring, alienating or creating charge over the disputed premises and had restrained the Respondent No. 2-Defendant No. 5 from taking any action in respect of the disputed plot and further restraining the Respondent No. 3- Defendant No. 6, RFC from auctioning or selling the disputed plot pending the suit.
3. The short facts giving rise to the present appeal are that the Respondent No. 1-plaintiff has filed the suit seeking declaration, accounts, mesne profits in respect of the Respondent No. 4-Defendant No. 3 partnership firm, and cancellation of lease deed in respect of the disputed plot, against the appellants and the Respondent Nos. 2 to 4 alleging inter alia that the plaintiff was the proprietor of the firm called M/s. S.R. Industries and that the RIICO had allotted him a plot bearing No. E-412 at Vishwakarma Industrial Area, Jaipur ad-measuring 4000 sq. meters on 25.4.72. Since the plaintiff was working in the Bank and had no financial resources to set up the industry, he had entered into a partnership with the appellant No.l- Defendant No. 1 Shri Devi Sahai Mittal by executing the partnership deed on 7.8.73 in the name of M/s. S.R. Industries i.e. the Respondent No. 4. The said partnership firm was also got registered under the Partnership Act with the Registrar of Firms. As per the said partnership deed, the Defendant No. 1 had 90% share and the plaintiff had 10% share in the profits of the firm. According to the Respondent No. 1-plaintiff, the said partnership firm was continuing and was never dissolved, however the appellant No.l had converted the said firm into a private limited company on 14.2.94, forging the document of dissolution and showing the appellant Nos. 1 and 2 to be the Directors of the said company. As per the further case of the plaintiff, the lease deed in respect of the plot in question was transferred in the name of the said company i.e. the appellant No.3 on 29.3.94 without cancelling the previous lease deed by the Respondent No. 2. Since the said company had taken the loan of Rs. 29.70 lacs from the RFC, mortgaging the said disputed property and since the said company did not pay the outstanding amount of loan, the RFC had taken over possession of the said premises on 4.6.97. According to the Respondent No. 1-plaintiff, the Respondent No. 2-RIICO on 26.8.96 had illegally cancelled the lease deed originally issued in his favour and hence the plaintiff had filed an appeal before the Competent Authority under RIICO Disposal of Property Rules, 1979, which appeal was dismissed on 6.9.97. The plaintiff had challenged the said order of Competent Authority by filing the Writ Petition being SBCWP No. 3562/97, which came to be dismissed on 2.6.05. The DB Special Appeal filed against the said order of the learned single Judge, was also dismissed on 11.1.08 on the ground of availability of alternative remedy. The plaintiff therefore had filed the suit thereafter on 3.7.08 claiming various reliefs. The R
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